Trump TACO trading rescue! Taiwan stock market 26K defense battle, Nvidia bottleneck, full analysis of crypto world getting liquidated.

Trump threatened to impose a 100% tariff but suddenly softened, triggering a “TACO trade” (Trump Always Chickens Out) that ignited a rebound in U.S. stock index futures. After the long holiday, the Taiwanese stock market faces pressure for a black Monday correction, with experts warning of a defense battle at 26,000 points. At the same time, the Taipei City Government is striving to retain Nvidia's headquarters, China's rare earth controls are escalating, the Netherlands has frozen assets of Wentai, and the crypto world is experiencing an epic liquidation, causing the global market to fall into multiple shocks.

Trump TACO Trading Secrets: From Tariff Threats to Sudden Softening

Last week during the Taiwan stock market holiday, the international financial market staged a major reversal. Trump announced that a 100% tariff would be imposed on Chinese goods, and China subsequently retaliated by launching the most severe rare earth export ban in history, invoking “extraterritorial applicability” clauses that affected the global supply chain. On Friday, there was a global market sell-off, with market capitalization evaporating by over 1.5 trillion dollars. The Taiwan stock market opened lower today and plunged more than 800 points before the decline gradually narrowed.

However, the plot quickly turned. A few days later, Trump softened his stance in a post on Truth Social, stating, “America hopes to help China, not harm it, and China does not wish to fall into economic recession.” This sudden shift in position is referred to by the market as the “TACO trade,” which stands for “Trump Always Chickens Out,” a term coined by Robert Armstrong. The operation mode of the TACO trade is as follows: Trump first suddenly announces high tariffs or trade threats, causing a panic-induced fall in the market, and then quickly softens or postpones the threats due to domestic and international pressure.

The TACO trading effect is immediate. Trump's change in attitude has improved market sentiment, with today's US stock index futures experiencing a significant rebound. Dow futures rose by over 350 points (0.8%), Nasdaq futures increased by 440 points (1.8%), and the S&P 500 index rose by 83.75 points (1.28%), alleviating market panic. Gold prices also reached a new historical high, indicating a coexistence of safe-haven demand and a rise in risk appetite.

The market is starting to learn how to use the TACO trading phenomenon for arbitrage: going long when Trump’s threats lead to a rapid fall in the market, expecting to take profits when policy reversals occur, forming a unique market operation model. However, this strategy is also fraught with risks, as there is no guarantee that Trump will back down every time; if a threat is actually carried out, followers of TACO trading may face heavy losses. In response, the Chinese Ministry of Commerce issued a statement criticizing Trump's tariff threats as “typical double standards,” stating that they are unwilling to fight but are not afraid to fight, and if the U.S. insists on going its own way, they will resolutely take countermeasures.

Taiwan Stock Market 26,000 Point Defense: Black Monday Stress Test

(Source: CMoney)

Affected by the sharp decline in the US stock market, Taiwan's stock market opened on October 13 under heavy pressure to compensate for losses, with concerns that a “Black Monday” could occur, and in a pessimistic scenario, it could even plummet by a thousand points. To respond to the potential market panic, Taiwan's three major financial ministries have entered a state of readiness. Market experts believe that the key to whether the bulls can stop the decline lies in three defensive lines: 26,900 points and 26,000 points are important observation points.

From a technical perspective, the Taiwan stock market has seen gaps form due to the impact of related news, leading to pressure after a significant rise and the beginning of profit-taking selling pressure. In the short term, we need to observe whether the monthly line can hold steady. If it can consolidate without falling, there may be a chance to continue the momentum; if it breaks down, it may need to revisit the major level of 25,500 points as well as the seasonal line. Institutions suggest monitoring whether the Taiwan stock market falls below this week's opening low on October 14 as a basis for trend judgment.

Against the backdrop of rising geopolitical risks, institutional investors have identified 3 military concept stocks that are expected to become the “shield of Taiwan” in the market. These stocks may exhibit relative resilience during market panic, and may even become a choice for capital hedging. However, the overall market sentiment remains weak; although TACO trading brings hopes for a rebound, the geopolitical risks have not been eliminated, and investors should remain cautious and manage risks well.

Multiple Black Swans Flying Together: Nvidia, Rare Earths, Semiconductors, crypto world All Sinking

In addition to the market turmoil triggered by TACO trading, multiple industries are also facing significant challenges. The deadlock over NVIDIA's headquarters land continues to ferment, and the Taipei City Government today sent a letter to Shin Kong Life Insurance, hoping to amicably terminate the land use rights contracts for T17 and T18. The Taipei City Government requested Shin Kong to boldly propose reasonable termination conditions, advancing in a consensual rather than compulsory manner, in order to expedite NVIDIA's acquisition of land. This matter concerns whether Taiwan can retain the regional headquarters and related talent of this AI giant.

China's upgraded control over rare earth materials has a cascading impact on the global supply chain. A McKinsey report indicates that it could affect millions of jobs in Germany, and experts warn that some Taiwanese manufacturers are importing rare earth materials through Japan, making the increased control from China significantly impactful on Taiwan's industries. Western countries are striving to promote domestic production of rare earths to reduce dependence risks, but this will take 5-10 years.

The Dutch government suddenly announced the freezing of assets and control of Nexperia, a subsidiary of Wingtech Technology, due to concerns over critical semiconductor technology flowing to its Chinese parent company. This incident occurs against the backdrop of the US-China technological sovereignty rivalry, indicating that European countries are also beginning to adopt a tougher stance.

The crypto market has experienced a historical level of Get Liquidated, with over $19 billion in derivatives positions evaporating within 24 hours. A mysterious whale precisely shorted the market before Trump announced tariffs, making a profit of about $200 million, raising suspicions of insider trading. Subsequently, influenced by Trump's softened remarks about “wanting to help China” (TACO trading), the crypto market quickly rebounded after the sharp fall. Despite the extreme volatility, institutions suggest that if one can grasp the market trends, crypto coins are still worth paying attention to.

These events intertwine to create a highly complex and uncertain global market environment. Although TACO trading offers hope for a short-term Rebound, the fundamental geopolitical tensions, supply chain restructuring, and struggles for technological sovereignty remain unresolved. Investors need to stay flexible in this variable environment, seizing the Rebound opportunities brought by TACO trading while also preparing for policy reversals.